| Did you know that it costs about six times more to | | | | winning philosophies such as recognizing the lifetime |
| market new customers than to keep existing | | | | value of a customer and properly trained your team to |
| customers happy and that a customer's lifetime value | | | | cater to your customers' needs. Are you doing all you |
| to your organization can be worth over $100,000? | | | | can to thrill your customers and encourage them to |
| Based on this, isn't it worth committing to make each | | | | return and refer others? Or, are your restaurant |
| customer happy and instituting a customer-friendly | | | | policies too restrictive and encouraging only a one-time |
| culture? | | | | stop? Do your policies turn your customers on or off? |
| Having a customer-friendly culture involves more than | | | | Cal Sheehy, Vice President and General Manager of |
| just offering quality food and service-it involves being | | | | London Bridge Resort, of Lake Havasu City, AZ says, |
| an easy, loose, and accommodating place to visit. To | | | | "We train our team with proven facts, numbers, and |
| understand the importance of adopting a | | | | statistics, such as the lifetime value of a customer, so |
| customer-friendly culture, it's important to understand | | | | they will better understand our philosophies and buy |
| the concept of the short-term and long-term, or lifetime | | | | into the essence of our training programs. Catering to |
| value of a customer. Most often, operators are | | | | our customers' needs and creating a friendly, |
| preoccupied with looking at the short-term worth of | | | | hassle-free environment is what we are all about-it |
| their customers, or one transaction during a single point | | | | pays dividends to us". |
| in time, instead of looking at the lifetime value. | | | | In addition to offering your customers quality food and |
| Calculating lifetime values allow you to place monetary | | | | service, review the list below of suggested |
| values on a customers' yearly contributions so you can | | | | customer-friendly standards. This list will help you |
| see the big picture. | | | | determine if your current policies and procedures were |
| To illustrate this point, consider this example. Your | | | | established for your customers' benefit or the |
| company establishes 10PM as the closing time for your | | | | convenience of your company. |
| restaurant and posts it on your front door, which | | | | Do you graciously... |
| customers depend on. Your loyal customers, Mr. and | | | | Allow substitutions? |
| Mrs. Porter, visit your restaurant at 9:45PM and your | | | | Permit customers to modify an entree and/or |
| staff curtly tells them the kitchen is closed. This | | | | make special requests (knowing you have all the |
| one-time transaction may have appeared as if your | | | | ingredients in house)? |
| operation incurred only a $50 loss (a single lost sale), | | | | Give extra toppings or bread at no charge? |
| the estimated dinner tab from a party of two people. | | | | Offer free soft drink refills? |
| Your staff may think, "So what...fifty dollars isn't worth | | | | Honor an old menu price? (as a one-time |
| taking one more table and staying late-no big deal." | | | | exception) |
| However, what your staff fails to consider is Mr. and | | | | Graciously handle separate checks? |
| Mrs. Porter's lifetime value. | | | | Omit plate charges? |
| To calculate the lifetime value, you need to evaluate | | | | Dismiss automatic gratuities at your customer's |
| the couple's long-term spending. Say the Porters spend | | | | request? |
| an average of $200 a month ($100 each). Over time, | | | | Let a customer use an expired coupon/promotion? |
| that comes to $2,400 a year, $12,000 over five | | | | Take several forms of payment? |
| years...and a whopping $24,000 in ten years! To take it | | | | Allow customers to be seated in a closed station? |
| a step further, when Mr. and Ms. Porter both tell five | | | | Place late-arriving customers at the top of the list |
| friends about there positive experience at your | | | | instead of penalizing them? |
| restaurant (knowing that a happy customer tells | | | | Seat customers slightly after closing hours? |
| approximately five people) then, a total of ten people | | | | Permit partial parties to be seated? |
| become lifetime customers, each valued at 12,000 also. | | | | Upon request, seat a party of two at a four-top? |
| Consequently, Mr. and Ms. Porter's 10-year value of | | | | Or, seat a party of four at a six top? |
| $24,000 ($12,000 each) soon becomes an estimated | | | | Let a customer change a table? |
| total value of $144,000, as they created 10 more | | | | Allow customers to add their bar tab to their dinner |
| life-time customers for your restaurant, each valued at | | | | tab? |
| $12,000, plus their combined value of $24,000. | | | | Allow two-for-one cocktails to be shared or split |
| Now that you know this, would you insist that your | | | | and delivered one at a time instead of both together? |
| staff keeps your kitchen open and does everything in | | | | Handle complaint situations in favor of the |
| their power to win your customers back? | | | | customer without having a mindset that all customers |
| Since Mr. and Ms. Porter can together influence 10 | | | | are looking for something for free? |
| people and they are now worth $144,000 to your | | | | If you answered "yes" to a large percentage of the list |
| operation, take the time to examine your existing | | | | above, that's great...and you're probably enjoying |
| customer service philosophies, which shape your | | | | repeat business. |
| policies. Honestly, ask yourself if you have adopted | | | | |